Latest data from Mortgage Advice Bureau, the UK’s leading mortgage broker, suggests that the UK housing market remained steady in April, despite the news of a General Election being called for June and ongoing economic and political uncertainty around Brexit.
Brian Murphy, head of lending for Mortgage Advice Bureau comments, “Whilst much has been made in the news of the decision to hold a snap election in a few weeks’ time the reality is that, now we can review actual data for April, at this early stage it would seem that so far, the impact on the UK housing market has been minimal.
As we all know, consumer sentiment plays a key part in terms of house price growth and sales volumes, and looking back over previous years there is a clear pattern prior to every Election that the months and weeks that proceed such an event are typically quieter, with activity picking up afterwards.
However, given that the timescales for the 2017 General Election are so short, the impact of this in most areas of the UK in terms of affecting the decision or not to purchase are negligible; for those who are already in the buying or selling cycle, it’s unlikely to affect their decision, and discretionary buyers – who are normally the most affected by economic or political events – make up a smaller than usual element of the current market, therefore whilst there will be some who decide to hold off until after June 8th to proceed, the majority of consumers are carrying on as normal.
In terms of transaction volumes and lending levels, recent data from the CML points towards ‘situation normal’, and house price growth is still in positive territory, albeit slowing down slightly but still in line with market expectations of between 2% and 4% growth overall for 2017. Industry sources, such as RICS, indicate an ongoing shortage of stock in many areas of the country which is another key factor in terms of property price stability. Additionally, according to the latest Halifax Housing Market Confidence Tracker, consumer confidence in the housing market has stabilised, following a dip in October 2016, which is another factor in terms of how we might expect the market to perform in the coming months.
Interestingly, even though the General Election was announced on the 18th April, and despite Easter being mid-month, we witnessed a pick up in activity in the last week of April from all sectors of the market; First Time Buyers, home movers and those remortgaging, suggesting that consumers don’t appear to have been ‘spooked’.
Something else to consider is that previously, we were comparing January, February and March 2017 with what was considered by many to be an unusually busy Q1 in 2016 due to the Buy-To-Let ‘spike’ ahead of the introduction of increased SDLT last April, which inevitably skewed any year on year comparisons. Therefore, when looking at year on year comparisons we’re now comparing ‘apples with apples’ and in this respect, with many key indicators for April 2017 when compared with April 2016 suggesting that the market is remaining stable.
Whilst it’s too early to tell what the market will be doing from 9th June onwards, it’s certainly perhaps reasonable to suggest that the current UK housing market remains steady overall given current events, and unless there is a significant change in consumer sentiment, may well remain so over the coming months.”
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